House May Revive MLR Bill, Rep. Blackburn Says

Rep. Marsha Blackburn, R-Tenn., vice chair of the House Energy and Commerce Committee today told the National Association of Health Underwriters (NAHU) to keep its eye on her committee and the Ways and Means Committee for action this year on health-reform policy-change initiatives, including a revival of the medical-loss ratio (MLR) bill. 

The dormant bill, H.R. 1206, which sundowned with the last Congressional session after it passed out of the Energy and Commerce Committee, would exempt agent commissions from the MLR calculated under the Patient Protection and Affordable Care Act (PPACA). The MLR provision limits administrative costs in health-insurance premiums to 15 percent of premiums for large insurance groups and 20 percent for small groups. H.R. 1206 stipulates that agent commissions would not count toward these administrative costs.

Agents say that, without an exemption, their commissions are being cut by up to 50 percent on health-insurance products.

The old H.R.1206 was sponsored by Rep. Mike Rogers, R-Mich., and Rep. John Barrow, D-Ga., and had scores of co-sponsors.

However, NAHU is looking at helping legislators craft a new bill serving agents on the MLR issue, and expanding it to address some of their other concerns with PPACA implementation as well.

“We are potentially looking at a broader broker bill dealing with how agents interact with the exchanges,” says Brooke Bell, director of government affairs for NAHU to PC360. For example, this bill could include concerns with the navigators and agents role in the state exchanges, which will be run in partnership with the federal government or by the states themselves.

However, action on the MLR initiative is now in a holding pattern, awaiting further details on the role of agents in the exchanges and other concerns of the membership.

The MLR regulations have made it “nearly impossible” for agents to invest in their businesses, Blackburn, a leading conservative voice on cutting spending and balancing the budget, said to the NAHU legislative session before agent and broker members left to lobby Congress today. 

To general agent applause, Blackburn championed two other bills proposed by her colleagues. For example, Rep. Dr. Charles Boustany Jr., R-La., has a bill, H.R. 763, to repeal the annual fee on health-insurance providers enacted by PPACA, and Blackburn, who is a sponsor of that bill, said the efforts to repeal this tax have received bipartisan support. 

She also received healthy applause for mentioning the Liberty Act – Letting Insurance Benefit Everyone Regardless of Their Youth – sponsored by Rep. Dr. Phil Gingrey, R-Ga. The bill, H.R. 544, introduced Feb. 6, would allow the states, not the federal government, to determine their age-rating bands to prevent spiking costs for young, healthy people that would propel them leave the health-insurance market in droves, as feared. 

Under PPACA, insurance providers must restrict the difference in premiums due to age to a 3-to-1 ratio. In reality, the cost disparity between a 26-year-old and 64-year-old is far greater, approaching or exceeding a 5-to-1 ratio, Gingrey states in a press release. To make up the difference, the costs will be passed on to young people in the form of higher premiums, with some increases as high as 40 percent, he stated.

The bills' chances in the Democratic-controlled Senate are uncertain. 

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